Monthly Archives: December 2016

Jan 1, 2003- NSW ‘Greenhouse Gas Reduction Scheme’ implemented

14 years ago, on the 1st of January 2003, the New South Wales government, under Bob Carr (who will get a few more mentions on this website), introduced its “Greenhouse Gas Reduction Scheme.” It had been designed by Frontier Economics and Danny Price (who will get a few more mentions on this website).  It used a baseline and credit system (rather than cap and trade) – and so may sound oddly  familiar to anyone who was paying attention to last December’s political bloodbath about the emissions intensity scheme for the electricity industry.  You know, the one that will now  NOT be part of the 2017 climate change review.

It was the world’s first mandatory emission trading scheme and “replaced a precursor scheme that required NSW electricity producers to create strategies to reduce the per-capita emissions-intensity of electricity production. The precursor scheme failed to force emissions reductions.”

Brad Jessup and David Mercer, ‘Energy policy in Australia: a comparison of environmental considerations in New South Wales and Victoria’ (2001) 32 Australian Geographer 7, 15-17

As Guglyuvatyy, (2011: 94) writes –
At a subnational level, for instance, the NSW Greenhouse Gas Abatement Scheme (GGAS) commenced in 1997 and became mandatory in 2003.63
Under the scheme (which is designed as baseline and credit), the per-capita GHG emissions associated with electricity consumption in NSW should be reduced from 8.65 tonnes CO2 in 2003 to 7.27 tonnes CO2 by 2007, and continue at this level until 2020. This target applied to electricity retailers, generators and some major energy users (NSW Government 2006). The participants can meet the targets either directly or by buying the NSW Greenhouse Gas Abatement Certificates (NGACs) which represent one tonne of avoided GHG emissions that are created through activities which reduce or offset emissions.

According to the NSW State Government, the scheme has achieved around 16 million tonnes of greenhouse savings since it started in 2003 and will accrue around 120 million tonnes by 2012 (NSW Government 2006). However, it appears that at least 83 per cent (2003), 76 per cent (2004) and 52 per cent (2005) of the NGACs were created by pre-existing low emission plant that did not have to increase their operation compared to pre-GGAS levels to create certificates (Passey et al. 2007). Undoubtedly some projects that produce NGACs represent additional abatement and the Scheme is likely to drive some extra investments in generators that have low emissions. However, serious concerns remain for many of the projects that have created NGACs to date.PhD thesis – Assessing carbon tax and emissions trading as policy options for climate change mitigation in Australia

All did not run smoothly with it, as Marianne Wilkinson reported on 11th September 2007..

THE gap between doing something about climate change and talking about it was revealed yesterday. Before the ink was dry on the Asia-Pacific Economic Co-operation forum’s Sydney declaration on climate change calling for a boost in global energy efficiency, the NSW scheme designed to do just that was crashing.

As a result, hundreds of dedicated carbon cops who spend their days installing energy-saving light globes and engaging householders on climate change were being told they are likely to face the chop as green businesses hit the wall.

Wilkinson, M. 2007. Going global, crashing locally. Sydney Morning Herald, 11 September.

The scheme survived until it was replaced by the Gillard government’s ETS on 1 July 2012.

Also on this day

2011 Australian Renewables target changed “From January 1, 2011, the scheme was split in two: the small-scale renewable energy scheme (SRES) and large-scale RET (LRET). Both work on the same basic principles as the original RET: renewable energy generators are able to generate either Small-scale Technology Certificates (STCs) or Large-scale Generation Certificates (LGCs), which are sold to purchasers of wholesale electricity who must surrender a prescribed quantity of STCs and LGCs each year. The benefit of the split RET was that it was supposed to reserve 41,000 GWh of the 45,000 GWh 2020 target for large-scale generators”